Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/65678 
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dc.contributor.authorJang, Tae-Seoken
dc.contributor.authorSacht, Stephenen
dc.date.accessioned2012-10-26-
dc.date.accessioned2012-10-31T13:16:58Z-
dc.date.available2012-10-31T13:16:58Z-
dc.date.issued2012-
dc.identifier.urihttp://hdl.handle.net/10419/65678-
dc.description.abstractIn this paper we empirically examine a heterogeneous bounded rationality version of a hybrid New-Keynesian model. The model is estimated via the simulated method of moments using Euro Area data from 1975Q1 to 2009Q4. It is generally assumed that agents' beliefs display waves of optimism and pessimism - so called animal spirits - on future movements of the output and inflation gap. Our main empirical findings show that a bounded rationality model with cognitive limitation provides a reasonable fit to auto- and cross-covariances of the data. This result is mainly driven by a high degree of intrinsic persistence in the output and inflation gap due to the impact of animal spirits on economic dynamics. Further, over the whole time interval the agents had expected moderate deviations of the future output gap from its steady state value with low uncertainty. Finally, we find strong evidence for an autoregressive expectation formation process regarding the inflation gap.en
dc.language.isoengen
dc.publisher|aKiel University, Department of Economics |cKielen
dc.relation.ispartofseries|aEconomics Working Paper |x2012-12en
dc.subject.jelC53en
dc.subject.jelD83en
dc.subject.jelE12en
dc.subject.jelE32en
dc.subject.ddc330en
dc.subject.keywordAnimal Spiritsen
dc.subject.keywordBounded Rationalityen
dc.subject.keywordDiscrete Choice Theoryen
dc.subject.keywordEuro Areaen
dc.subject.keywordNew-Keynesian Modelen
dc.subject.keywordSimulated Method of Momentsen
dc.subject.stwNeukeynesianische Makroökonomiken
dc.subject.stwBeschränkte Rationalitäten
dc.subject.stwSunspoten
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen
dc.subject.stwTheorieen
dc.subject.stwEurozoneen
dc.titleIdentification of animal spirits in a bounded rationality model: An application to the euro area-
dc.typeWorking Paperen
dc.identifier.ppn728650630en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:cauewp:201212en

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